The doctrine of caveat emptor means “to the victor go the spoils.”
An employee whose employer breaches an employment contract can recover lost wages
or salary as compensatory damages.
The person giving a deposition is called the proponent.
A grand jury determines guilt.
Under the UCC, the buyer or seller can reserve the right to set the price at a later date.
In order to meet the consideration requirement, the legal detriment suffered by each
party must have been given in exchange for that of the other party.
A copy of the proxy and the proxy statement must be filed with the Securities and
Exchange Commission at least sixty days before the materials are sent to the
shareholders.
A statute of limitations puts a limit on the damages that can be sued for under a
contract.
The doctrine of conscious parallelism provides that, even if there is no concerted action,
a violation of the Sherman Act occurs if two or more firms decide not to deal with a
retailer.
If a buyer breaches a sales contract, the buyer only bears the risk of loss after the breach
has occurred and not before.
In a unilateral contract, there is no contract until the offeree performs the requested act.
The Uniform Commercial Code places the risk of loss of an incomplete check on the
payee.
The SEC may bring a civil action to recover monetary damages from violators of
securities laws.
Pursuant to the 5thAmendment to the United States Constitution, a party to a civil
action at law is guaranteed the right to a jury trial in a case in federal court.
In a click-wrap licensing agreement, the licensor indicates his or her acceptance by
clicking on a prompt button on the screen labeled “I accept” or “I agree.”
The major pleadings are the trial complaint, the trial answer, the appellate complaint,
and the appellate answer.
Parol evidence may be admitted in court if it shows that a contract is void or voidable.
Assessment fees are typically billed as a flat monthly or annual fee, or as a percentage
of gross sales.
If two (or more) persons are liable for negligently causing the plaintiff’s injuries, both
(or all) can be held liable to the plaintiff if each of their acts is a substantial factor in
causing the plaintiff’s injuries.
Nominal damages are awarded in order to return the non-breaching party to the status
quo.
Under the Endangered Species Act, the “taking” of an endangered species requires that
at least one specimen of the species ends up in the possession of the party.
Implied authority cannot conflict with express authority or with stated limitations on
express authority.
According to the mailbox rule, the offeree must accept the terms of the offer with
modification.
Upon formation, an accord and a substituted contract both have the same effect on the
duties of the original contract.
A nolo contendere plea can be used as evidence of liability against the accused at a
subsequent civil trial.
A principal is liable for the innocent, but not the intentional, misrepresentations made
by an agent acting within the scope of employment.
The right to sue another party for a violation of personal rights can usually be assigned.
The Dodd-Frank Wall Street Reform and Consumer Protection Act grants state
governments substantial new powers to regulate consumer finance and lending.
In deciding a motion for judgment on the pleadings, the judge cannot consider any facts
outside the pleadings.
The debtor is the party that extends credit, and to whom the debt is owed.
A lender who is unsure whether a debtor will have sufficient income or assets to repay a
loan may require another person to guarantee payment. If the borrower fails to repay the
loan, that person is responsible for paying it. This responsibility is called trusteeship.
Taken to an extreme, the result of ethical fundamentalism could be considered unethical
under most other moral theories.
An obligor can raise the defenses of fraud, duress, undue influence, minority, insanity,
illegality of the contract, mutual mistake, or payment by worthless check of the assignor
against enforcement of the contract by the assignee.
If the government agrees to accept a nolo contendere plea, the accused and the
government usually enter into a plea bargain in which the accused agrees to the
imposition of a penalty and admits guilt.
Insane persons are liable in quasi-contract to pay the reasonable value for the
necessaries of life they receive.
Stock dividends and stock splits must be registered with the SEC.
The implied warranty of merchantability can be disclaimed by using the word
“merchantability” or by saying that the item is sold “as is” or “with all faults.”
Most cities and towns are formed as “quasi-private” corporations.
Which of the following is not needed in all cases in order to have a valid contract?
A) contractual capacity
B) an agreement
C) a signed written document
D) consideration
E) a legal object
What kind of contract is based on the conduct of the parties?
A) express
B) action-oriented
C) implied-in-fact
D) implied-in-law
E) quasi-contract
The courts of many states recognize that leased, residential premises must be fit, safe
and suitable for ordinary residential use. This rule is called the:
A) warranty of quiet enjoyment.
B) warranty of suitability.
C) warranty of habitability.
D) warranty to maintain the premises.
E) warranty against private nuisance.
All of the following are duties of the agent to the principal except:
A) loyalty.
B) notification.
C) performance.
D) indemnification.
E) accountability.
The legal effect of the presence of a superseding event is that:
A) the defendant is not liable even if the plaintiff has proved all the elements of
negligence.
B) the plaintiff and defendant will share liability.
C) the burden of proof shifts from the plaintiff to the defendant.
D) intent must be proven in addition to the elements of negligence.
E) the defendant is legally liable without further inquiry.
What use may a court of one state make of an earlier state court decision made in
another state?
A) If the earlier decision in the other state is relevant, it must be followed even though
it is from another state because all of the states are part of one legal system.
B) When deciding the case, the court deciding the case cannot take the decisions of
other states into account.
C) Earlier court decisions are equally relevant as precedent whether they were made in
the same state or in a different state.
D) The court of the state deciding a case can look to earlier court decisions in other
states for guidance in deciding the case at hand, but is not required to follow them.
E) The decision is legally binding.
Over time, most contracts are:
A) executory at one time and executed at another time.
B) bilateral at one time and unilateral at another time.
C) valid at one time and void at another time.
D) implied at one time and express at another time.
E) voidable at one time and void at another.
When someone was left a specific item that is no longer owned by the testator at the
testator’s death, the beneficiary receives nothing under the doctrine of:
A) ademption.
B) abatement.
C) intestacy.
D) per stirpes distribution.
E) renunciation.
________ are the primary source of criminal law.
A) District Court cases
B) Superior Court cases
C) Statutes
D) Administrative regulations
E) Treatises
When an assignor makes an assignment of a right under a contract, the assignee is
under a duty to notify the obligor that:
A) the assignment has been made.
B) performance must be rendered by the assignee.
C) the assignment has been made, or performance must be rendered by the assignee.
D) the assignment has been made, and performance must be rendered to the assignee.
E) the assignment has been made, and performance must be rendered to the assignor.
Negotiation of which type(s) of instrument requires indorsement?
A) bearer instruments only
B) order instruments only
C) both bearer and order instruments
D) neither bearer nor order instruments
E) order instruments, but only if they are restrictive
If a warrantor chooses to make an express warranty, the Magnuson-Moss Warranty Act
requires that the warranty be labeled as either ________ or ________.
A) legal; equitable
B) written; spoken
C) conditional; unconditional
D) full; limited
E) formal; informal
Jan owns eight hundred of the two thousand issued and outstanding shares of Jackalope
Corporation. There are five members of the board of directors, three of whom are up for
election at a shareholders’ meeting. If each share of stock is entitled to one vote, what is
the maximum number of votes that Jan can cast for any one of the candidates for the
positions on the board under cumulative voting?
A) eight hundred
B) two thousand
C) twenty-four hundred
D) four thousand
E) six thousand
Compared to an employee, an independent contractor is characterized by:
A) not being paid as much for the work performed.
B) a lack of liability for his or her own actions.
C) more freedom to perform designated work in a manner he or she deems appropriate.
D) less ability to hire others for assistance.
E) more control exercised by the principal.
Which of the following is an effect of the Sony Bono Copyright Term Extension Act of
1998?
A) Copyright protection was extended from 17 to 20 years.
B) Individuals were granted copyright protection for their life plus 70 years.
C) The length of validity for a corporate copyright was extended to be the same as for a
copyright held by an individual.
D) Copyright protection was extended to computer programs.
E) Copyright protection for music was extended so that it is now longer than that for
other types of copyrighted material.
To whom can a thief pass good title to stolen goods?
A) any purchaser who gives consideration
B) any purchaser or donee who is unaware that the goods are stolen
C) any good faith purchaser for value
D) any buyer in the ordinary course of business
E) no one
If a partnership is formed but there is no agreement as to how long the partnership will
exist, then:
A) the partnership will fail because of the lack of intent regarding duration.
B) the length of time that the partnership will be in existence will be established by the
Uniform Partnership Act.
C) this will be known as a partnership for a term.
D) the duration of the partnership will be for a reasonable time.
E) the partnership will last indefinitely until there is a partnership dissolution.
Which of the following is true?
A) Voting trusts and voting agreements both require a transfer of stock certificates to a
trustee.
B) In a voting trust, the shareholder grants the trustee the right to vote the shares, but in
a voting agreement, the shareholders vote their own shares.
C) Voting agreements, but not voting trusts, must be accompanied by proxies executed
by the shareholders.
D) Voting trusts are irrevocable, while voting agreements can be either revocable or
irrevocable.
E) Voting agreements cannot extend for more than ten years.
Which of the following is true about voting trusts related to shares of corporate stock?
A) They can be oral or written, and are effective for an indefinite period of time.
B) They must be written, and cannot exceed ten years.
C) They can be oral or written, and cannot exceed ten years.
D) They must be written, and cannot exceed one year.
E) They must be written, and are valid for the remaining existence of the corporation.
Which of the following is true about the tort of defamation?
A) Publication of a statement of opinion is not the same as publication of an untrue
statement of fact and is usually not actionable.
B) Publication of a statement of opinion is the same as publication of an untrue
statement of fact and is usually actionable if the opinion is known to be damaging to the
plaintiff’s reputation.
C) Truth is not a defense if privacy was invaded.
D) The plaintiff must prove that the statement was made to at least three (3.) other
people.
E) The plaintiff must prove that the statement was made in writing.
Goods being shipped by boat are sent F.A.S.
Which of the following is true about termination statements?
A) It is generally the responsibility of the debtor to file the termination statement.
B) It is generally the responsibility of the secured party to file the termination
statement.
C) The debtor and creditor have joint responsibility to file the termination statement,
since it must be signed by each.
D) The obligation to file a termination statement arises only upon a debtor’s request that
one be filed.
E) Termination statements must only be filed if the debtor defaulted before the due date.
You go to the Cosmic Runner’s Supply Store in Asheville. The salesperson shows you
some shoes and says, “In a race, these shoes pick up the cosmic energy from the runners
around you and channel it into your own legs. This causes anyone wearing these shoes
to run twice as fast as in normal shoes and makes those around you run more slowly.”
In your next race, you do only slightly better than usual, and those around you seem to
run as fast as usual. If you sue on the basis of fraud in the inducement:
A) you would lose, because the statement did not contain a factual assertion.
B) you would lose, because your reliance was not justifiable.
C) you would win if most runners do not go twice as fast in the cosmic shoes.
D) proving only the salesperson’s intent to deceive is enough to win your fraud case.
E) you would win, but only if you could establish that the shoes cost over the legal
minimum amount of $50 necessary to bring a breach of contract action.
A dog food manufacturer advertises that its large package of dog food is the “largest
container of dog food available for home use.” This claim is technically correct because
the container itself is the largest sold, but the container is only about two-thirds full of
food. Thus, the quantity of dog food is not the largest available in a consumer package.
The package does, however, clearly indicate the actual weight of food inside it. Which
of the following is true?
A) There is no false and deceptive advertising in this case, because every statement
made by the manufacturer is true.
B) There is no violation in this case, until it can be proven that someone has been
misled.
C) The representation made by the manufacturer constitutes mere ‘sales talk,” and is
therefore not a violation of law.
D) Assuming that the manufacturer’s representation is likely to mislead a reasonable
consumer, the claim is false and misleading.
E) There is no violation here, because products for animal consumption are not covered
by the Act.
Slick Oil Producers contracts to deliver 1,000 barrels of lubrication oil to a buyer on or
before June 15. On May 15, Slick informs the buyer that it will be unable to deliver the
oil until after August. The buyer demands that Slick perform the contract, but to no
avail. Which of the following best describes the buyer’s rights in this situation?
A) The buyer must treat the contract as breached on May 15.
B) The buyer must wait until June 15 to determine if there has been a breach.
C) The buyer may treat the contract as breached on May 15.
D) The buyer may wait until June 15 to see if the seller performs.
E) The buyer has the option to either treat the contract as breached on May 15 or wait
until June 15 to see if the seller performs.
Which of the following is true about articles of limited partnership?
A) They must be filed along with the certificate of limited partnership.
B) The articles of limited partnership apply only to the general partners.
C) Without articles of limited partnership, the partnership will be treated as a general
partnership.
D) If there are no articles of limited partnership, the certificate of limited partnership
will serve as the articles.
E) Preparation of the articles of limited partnership is required by law in all states.
Which of the following types of speech has limited protection under the First
Amendment?
A) dangerous speech (including such things as yelling “fire” in a crowded theater when
there is no fire)
B) fighting words that are likely to provoke a hostile or violent response form an
average person
C) speech that incites the violent or revolutionary overthrow of the government
D) offensive speech
E) obscene speech
A lease that runs from January 1, 2011 until August 31, 2011 and does not automatically
renew would be a:
A) tenancy for years.
B) periodic tenancy.
C) tenancy at will.
D) tenancy in sufferance.
E) tenancy per autre vie.
Which of the following is true about drafts?
A) Drafts are two-party paper.
B) A draft must have a bank as the drawee.
C) A draft contains an order to pay.
D) All drafts are payable on demand.
E) Drafts are a conditional written order.
________ intent crimes require that the perpetrator either knew or should have known
that his or her actions would lead to harmful results.
A) Actual
B) Exacting
C) Specific
D) General
E) Statutory
Which of the following kinds of jurisdiction would be necessary and sufficient for a
court to hear a case?
A) subject matter and in personam and in rem
B) subject matter or in personam or in rem
C) subject matter and either in personem or in rem
D) in rem and either subject matter or in personam
E) in rem and in personam
Share exchanges are often used to create:
A) general partnerships
B) limited partnerships
C) corporations
D) limited liability companies
E) holding company arrangements
What is the purpose of the parol evidence rule? Should parties to a contract always be
able to tell their story and then leave it to the jury to determine who is telling the truth?
Does the parol evidence rule deny a party’s right to be heard in court? Why are oral
statements made after the contract is formed not subject to the rule?
Adam, Bob, Charlie and Dan formed an architecture general partnership in 1992.
Business went well for many years, until Adam began “cutting corners” on his jobs in
2000. He was voted out of the partnership in December of 2000. In June of 2001, the
partnership and all four partners were sued by one of Adam’s clients. In October 2001,
Ed was admitted to the partnership. In March of 2003, three lawsuits were filed against
the firm and its partners. The first was based on Adam’s work in 1999. The second was
based on Bob’s work in The third was based on Charlie’s work in 2002. Discuss Ed’s
liability for these lawsuits.
A car and truck manufacturer has noticed increasing sales of aftermarket sports racks by
companies such as Yakima and Thule. Along with this, it has noticed that fewer
customers order sport utility vehicles, minivans and station wagons with the optional,
factory-installed luggage racks. Marketing surveys show that many customers want the
flexibility that these aftermarket racks provide. For example, they are removable, and
they can be fitted with attachments for various kinds of equipment such as skis and
kayaks. The manufacturer has introduced its own line of similar removable racks, but
they have not sold well. One reason is a perception of lower quality that is only partially
accurate. The car and truck manufacturer has decided to include one of these racks as
standard equipment with all of its sport utility vehicles, minivans and stations wagons.
It will include the basic rack, but no special attachments. The price of these vehicles
will increase to cover the cost of the rack. Because the rack is removable, there is no
problem with a customer being forced to drive a vehicle with a rack on it that the
customer does not want. Discuss the antitrust implications of this action.
Why, in the absence of an agreement to the contrary, should profits and losses of a
limited liability company be distributed equally among members, regardless of their
capital contribution? Would it not seem more equitable if profits and losses were
distributed based on members’ capital contributions?
Mandy is the chief executive officer of ToughTred, Inc., a company that manufactures a
special all-terrain tire that her company sells to construction companies and foreign
governments (with United States approval) for industry and defense vehicles. Japan has
made a very large purchase, but has not paid for the contracted goods. Mandy seeks
your advice. What are the options available to ToughTred, Inc.?
Mark sold his car to Mary. Mary paid with a certified check. The check was made out
for $18,000, the agreed-upon price for the car. After they had exchanged paperwork and
closed the deal on the car, Mark noticed that the bank had certified the check for
$10,000, rather than the $18,000 amount of the check. Mark then altered the check to be
for $28,000. How much must the bank pay on the check?
Jenny has a checking account at Intrastate Bank. Jenny loses her checkbook. Richard
finds it and forges a check payable to himself, indorses it, and properly negotiates it to
Yummy Treats Restaurant. Yummy Treats cashes the check at Intrastate. Jenny learns of
the forgery and complains to Intrastate. What are the liabilities of each of the parties
involved?
Anne was hired by Peter to sell a condominium in San Francisco. The asking price for
the modest two-bedroom unit was $2,300,000. Peter told Anne he would sell the home
for as low as $2,100,000, but that she should try to obtain the highest possible price,
without disclosing the fact that he was willing to accept $2,100,000. A good friend of
Anne’s was in the market for a two-bedroom condominium in San Francisco. In fact,
this friend had come to Anne to help her find a place and negotiate for it. Anne’s friend
said that she could afford to spend no more than $2,000,000. When Peter hired Anne to
sell his condominium, Anne told her friend about it and the asking price. Anne told her
friend, “Don’t even bother. He won’t go below $2,100,000; that’s his bottom price.”
Anne then proposed to her friend that they “pool their resources,” with Anne fronting
some money through her friend, but not having Anne’s name on the contract as a
purchaser. Before they could finalize the details, Anne’s friend received a raise and
decided to buy the condominium. Anne negotiated a price of $2,100,000 on Peter’s
behalf. Peter later found out that Anne had told her friend about his bottom price, and
about the plan for Anne to help buy the house. What claims, if any, does Peter have?
One of the cornerstones of the American legal system is the concept of trial by jury. The
fact remains however that following the jury’s verdict, the judge has a right to
completely reverse that verdict. How would a judge do this, and under what
circumstances should a judge do so?
Mike is considering opening a barbecue restaurant. He can either design his own, or
obtain a franchise for a Bubba’s Roadkill Barbecue House (which does not actually
serve roadkill!) What factors should Mike consider in deciding which course of action
to take?
Sally wants to start a limited liability company named “Grocery Shopper” to help
people who are too busy to go to the grocery store. Is there any problem with this
name? If so, what?
Why are quasi-contracts needed? Why is it not better to just say that unless parties
express or impliedly make a contract, there is no deal?
Susan hired an agent, Ricardo, to buy food for her restaurant. Susan told the manager of
her supplier, Good Food, that Ricardo could buy supplies on her account.
Unfortunately, Susan caught Ricardo stealing cash from the register, and fired him
immediately. Susan took no steps to notify Good Food that Ricardo no longer had the
authority to purchase food on her account. After he was fired, Ricardo went to Good
Food and purchased $1,000 of food in Susan’s name. Ricardo sold the food to his
friends in order to acquire money to leave town. Is Susan liable to Good Food?
Kathy, a certified public accountant, prepares a registration statement on behalf of
Kyoung, Inc. Kyoung provides financial information to Kathy that is inaccurate. Kathy
investigates the information and recognizes a number of problems, which she shares
with Kyoung. The registration statement contains corrected financial information.
Kathy’s investigation, however, was not reasonable, and it fails to reveal some material
facts Kyoung concealed, which results in a misrepresentation of the true condition of
the company. If someone purchases stock in the company and suffers a loss, what is the
liability of Kathy and Kyoung, Inc.?
When is it appropriate for a landowner to apply for and be granted a variance regarding
zoning laws?